Cox Eyes IPTV Service

Despite cutting short its recent trial of Fanhattan’s Fan TV service, Cox Communications is planning to launch an IP video service for broadband subscribers that could closely resemble that trial.

Cox Communications Inc. CTO Kevin Hart told Fierce Cable that the third largest US MSO has a virtual cable video service under development that, like the aborted flareWatch trial, would deliver TV channels over IP. He also said that Cox received positive feedback from the flareWatch trial and that it is now in the "trial post-mortem evaluation phase."

What Hart didn't spell out, though, is how Fan TV fared in the flareWatch experiment: what consumers liked about it and what Cox and Fanhattan LLC
learned from the trial. Despite the spotlight on flareWatch, useful information has been scarce. But now some details are emerging.

Fan TV on trial
The Cox flareWatch trial this summer captured the cable industry's attention for two important reasons. First, it introduced the Fan TV experience, which was built around start-up company Fanhattan's streaming hardware and custom user interface. Second, it bundled Cox broadband service with an IP video streaming package, a novel approach in an industry where TV service is typically separated from Internet delivery. (See Cox's IPTV Trial Flames Out.)

As a concept and a demo, Fan TV has gotten rave reviews. Tech editors have praised the design of Fanhattan's set-top box, the look of the Fan TV on-screen interface, and the functionality of the touch pad remote control. Recently Time Warner Cable Inc. (NYSE: TWC) General Manager Mike Angus even told Light Reading that he (not speaking on behalf of his company) personally loves the product, and that he thinks Fanhattan's approach is "spot on… an intuitive way to bridge the CE and pay-TV world."

In conducting its Fan TV trial, Cox was mainly seeking user feedback. In an email, a Cox spokesperson explained that the MSO tried out the service on two groups of customers, "a very small group of friendlies that we personally interviewed a couple of times and then a larger commercial group of trial participants who we asked to participate in a written survey (but not all participated)." The spokesperson said the MSO was "looking for feedback on the concept and experience, although we were trying to distinguish between experience elements that were inherent to the longer term product and value proposition (e.g., Did they like the buttonless touch remote?) vs. those that were simply a function of this being a very early stage beta (i.e., did the product have any tech bugs). Also, we were looking for feature and functionality improvement suggestions."

While Hart says Cox received positive feedback from the flareWatch trial, at least one participant was not very complimentary. Speaking on condition of anonymity, this user described to Light Reading numerous problems with the Fan TV UI.

The user called the interface beautiful, but cumbersome, and said the remote was disorienting. He detailed his difficulty in jumping back and forth between different content options and cited a lack of navigational shortcuts that could have made the UI more user-friendly. He had additional issues with the search function and disliked many of the on-screen graphic effects, which he felt further impeded usability.

The remote control created even more of a challenge. According to the flareWatch user, interaction with the TV through the remote was not intuitive, and if the remote was held askew, it didn’t always respond accurately. "It felt nice in the hand, but didn’t really work," he said. Overall, he concluded, Fan TV was "very tiresome to use."

Cable companies weigh in
Now that Cox has said it will launch a commercial product, the claim that it was primarily testing the Fan TV interface, and not whether to move forward with IP video, holds more weight. Cox hasn't said if it will move forward with Fanhattan as a partner, but it likely has a better idea of what it wants to do after collecting user feedback.

Cox isn't the only cable operator exploring options for bundling broadband with IP video. Comcast Corp. (Nasdaq: CMCSA, CMCSK) has introduced services that combine Internet delivery with a limited line-up of regular TV channels, and added access to HBO/HBO Go and Comcast's StreamPix streaming video product. Although traditional television is still part of the package, the focus is as much on the IP video features as the standard TV service. (See Comcast Set to Bundle Broadband & HBO)

IHS Inc. analyst Erik Brannon thinks there's a knock-on benefit to cable's increasing interest in IP-delivered TV service. While there may not be significant room for growth in the pay-TV market, Brannon believes the TV Everywhere trend as a whole can win subscribers back into the cable fold.

"What we're doing with TV Everywhere is we're training people back into the behavior of purchasing pay-TV," said Brannon. "I think that TV Everywhere has a significant opportunity to win back… the population of people that we consider to be cord-nevers… if you reach them when they're young enough in the household, with great enough variety and convenience."

If there's one thing that is clear, it's that cable companies do want to deliver a richer TV experience. Between IP video services, new advanced program guides, and cloud DVR features, cable operators are working overtime to compete with over-the-top (OTT) video players and other pay-TV providers.

Whether Fan TV ultimately plays a part in that effort remains to be seen.

Re: Courting the "cord-nevers" Wow, that's quite a story. I hope you paid your son some commissions for his fine work. :) Anyway, I don't think cable can really draw in the cord-nevers until it drops its insistence that people still take video subscriptions too. I mean, what's the point of getting a broadband video package if you still have to pay for the traditional video package? There's no incentive there.

Re: Courting the "cord-nevers" Is this a blink? When we started the first video over dsl in the late 90s, competing with cable seemed a pipe dream. It paid well, but it was hard to really believe. We came up with a slogan "Turn your copper into Gold". It was my idea to gold plate thousands of pennies and hand them out as reminders. I taught my 3 year old son a speech, gave him a pocket full of gold pennies and released him in trade shows. He would catch the eye of an adult, walk up and put a penny in their hand, and say, "Wanna turn your copper into gold? See my daddy."
My son is now in engineering school, but many guys still have their gold pennies.

Re: Courting the "cord-nevers" Very good point. And cablecos are experimenting with lower-priced tiers, at least for an initial promotional period. Strategy: Hook consumers at an introductory rate with a cool product, and then reel'em in later with higher prices.

Courting the "cord-nevers" If cable is hoping to design an IP video product that convinces those who haven't yet started paying for TV to develop that habit, it will have to be a very inexpensive offering. I'm assuming that audience isn't at the center of an IP video strategy, however, and it will be interesting to see how Cox's intentions play out and what the servcie looks like.

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